Exploring the Top 4 Construction Loans in Washington
Whether you’re planning to build a new home or renovate an existing property in Washington, construction loans can provide the financing you need. Let’s delve into the details of construction loans in Washington, their benefits, and explore the best lenders offering these loans.
Key Terms: Construction loans are short-term financing options for construction and renovation projects. They typically require strong credit history and a sizable down payment. Borrowers need to provide detailed construction plans, cost estimates, proof of income, and other financial information.
Washington State’s Unique Appeal
Washington, known as the Evergreen State, boasts national parks, iconic landmarks like the Space Needle in Seattle, and is named after the first US president, George Washington. With the median home price currently at $452,400, many homebuyers are opting for construction loans due to low housing inventory. The cost of building in Washington ranges from approximately $80 to $125 per square foot.
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Benefits of Construction Loans in Washington
Construction loans offer several advantages:
- Interest-Only Payments: During construction, you typically make interest-only monthly payments, reducing financial strain.
- Flexible Loan Terms: Unlike traditional loans, construction loans offer flexibility in terms, with customized financing based on your building plans.
- Rate Lock: Some loans allow you to lock in the interest rate at the start of construction, providing rate security.
- Scrutinized Plans: Lenders review construction plans meticulously, ensuring thorough project planning and execution.
- Choice of Builder: Borrowers have the freedom to select their preferred contractor and architect.
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Top 4 Construction Loans in Washington
- US Bank:
- Requires a 720 credit score.
- Offers various down payment options: 10% down up to $750,000, 20% down up to $1.5 million, 25% down up to $2 million.
- Loans up to $10 million available.
- Suitable for primary residences and second homes.
- Allows lot purchase as part of the down payment.
- Offers major renovation loans.
- Provides a one-time-close option with 12-24 month build periods.
- Supports 30-year fixed One-Time-Close or ARM (5/1, 7/1 & 10/1).
- Interest-only payments during construction.
- No prepayment penalty.
- Not suitable for speculative or investment builds.
- Washington Federal Bank:
- Offers all-in-one construction to permanent loans.
- Allows cross-collateral loans, providing flexibility for selling your current home.
- Handles draws and inspections during construction.
- Wintrust Mortgage:
- Features one-time closing to pay closing costs only once.
- Allows upfront rate lock to avoid interest rate risk.
- Offers FHA, VA, and Conventional options.
- Down payment options include 0% down up to $822,375 (VA ONLY), 3.5% down up to FHA County Limits ($356,362-822,375), and 10% down on second homes.
- Requires a FICO score of 680+.
- Supports stick-built and modular homes.
- Excludes log homes, metal homes (barndominiums), self-builds, and ADUs (Accessory Dwelling Units).
- Timberland Bank:
- Provides a two-step construction loan with interest-only payments.
- Offers a 12-month construction term.
- Assists with converting to permanent financing.
- Accepts owner-builders.
- Partners with Northwest Construction Control (NWCC) for inspections.
Is a Washington Construction Loan Right for You?
Construction loans in Washington offer a range of options to cater to various needs. They feature flexible credit score criteria and down payment options. To make an informed choice, assess these loans against your specific requirements.
To gain deeper insights into construction loans in your state, partner with a loan officer experienced in construction financing. They can guide you through the process and help you build your dream home. Feel free to reach out if you have more questions or need further assistance.
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